Four Questions for...Hugh Howey

By Rachel Deahl
|

Aug 13, 2014

With the Amazon-Hachette dispute showing no signs of resolution, PW spoke to Wool author Hugh Howey, who has been an outspoken advocate for Amazon, about the ongoing stalemate, e-book pricing and where he thinks this situation is headed.

Amazon has said, repeatedly, that what is at stake in its sales terms dispute with Hachette is e-book prices. Amazon has also said that it is lobbying to keep e-book prices low. Hachette described the situation as a battle to preserve a healthy bookselling environment, that includes physical retailers. Do you think this is really about e-book prices or a healthy bookselling ecosystem? Isn't it ultimately about two companies that are each attempting to maintain a better operating margin?

I think it's all of those things, simultaneously. Amazon believes it can sell more books and please more of its customers at a price range of $4.99 to $9.99. Hachette believes e-books cannibalize print sales to the detriment of its longstanding relationship with brick and mortar stores. Hachette has also expressed worry over how much of the book market Amazon controls, and any increased share of e-books strengthens that dominance.

It is also about better operating margin, as you suggest. Amazon is currently discounting e-books at the expense of their own margin, while paying Hachette the full amount based on list price. Hachette needs Amazon to do this discounting, otherwise their readers shop for other e-books. Douglas Preston, one of the authors vocally in support of Hachette's control over e-book prices, has felt this wrath from his readers in the past, which is why one of his complaints today is that Amazon is refusing to discount his e-books enough! Which is a strange argument. It tacitly agrees with Amazon's position, which is that Hachette's e-book prices are much too high.

Of course, Hachette wants to maintain its current deal with Amazon, where it makes 70% of the list price, Amazon takes a hit by discounting down to sane levels and makes perhaps 5%, and Hachette enjoys record profit margins. Look at News Corp's latest earnings report; under "Book Publishing," you can see the increase in earnings due to e-books and a clear admission that this format enjoys much greater degree of profitability. As a reader and a writer, I would love to see those record profits more evenly distributed in the form of higher royalties to authors and lower prices for readers. Hachette disagrees. They want to keep it all. From what I understand, they aren't even currently negotiating with Amazon to settle this dispute, as they can't possibly get a better deal than the one they currently enjoy.

Do you think the letter from Authors United, that ran as an ad in Sunday’s NY Times (and was signed by over 900 authors), was off base? If so, how?

I think the letter and the complaints are horrifically inaccurate. This group continues to use the word "boycott" when all of Hachette's current titles are available for sale. Can it get more misleading than that? Amazon has removed pre-order buttons for titles that aren't yet available. They have also stopped stocking many Hachette titles at their warehouses. For all we know, Amazon is planning for the eventuality that they can no longer sell Hachette's books. So why promise readers today that they will in the form of a pre-order? And why stock up on their titles in warehouses if they'll just have to return them?

What these authors fail to appreciate is that Hachette is using them as shields. There is absolutely nothing Amazon can do to harm Hachette that doesn't harm its authors. Hachette knows this. That's why they have not only rejected three offers by Amazon to make author royalties whole during these negotiations, they haven't even bothered to make a counteroffer. Hachette is content to kick the current contract down the road indefinitely, daring Amazon to remove all links for their website and suffer the public relations fallout that would ensue.

What's really striking about the letter is that a real boycott is in effect, and that's of Amazon-published titles at brick and mortar stores. No one is crying foul there, and it's a genuine boycott that affects hundreds of authors. I write dystopian novels for a living, and even I wouldn't dare make up this kind of doublespeak and bizarre behavior. It boggles the mind.

Amazon’s response to the Authors United ad, which was posted on readersunited.com, called on KDP authors (as well as general readers), to contact Hachette CEO Michael Pietsch and ask the publisher stop trying to keep e-book price unnecessarily high. Industry talking head Mike Shatzkin had an astute take on the letter and pointed out, rightly I believe, that lower-priced e-books from the big publishers is actually a negative thing for KDP authors, who are competing for audience share with legacy-published writers. What’s your take on this?

I blogged about this on my site. If you want to understand this mindset, look at the indie author community, where many authors share ideas and encouragement, participate in box sets, reveal anything that works for them in the hopes it might work for others, and where you're more likely to see a writer tout someone else's book rather than their own.

I have spoken with Hachette authors who are frustrated with the price of their e-books. They feel powerless. They can't speak up for fear of reprisal. When people like Mike act stunned that anyone would fight for these authors who can't fight for themselves, it tells me a lot about how they see the world. It's not how I see it. I don't ever want to see the world like that, even if it's accurate. Because seeing the world like this is the first step in making it so.

I've been incredibly fortunate in my writing career. I've sold more books than I ever dreamed. I don't care if I ever sell another book in my life (and my agent adores me when I say stuff like this). I and others now find ourselves in a position to speak up for better conditions for writers, and we don't have to fear any reprisal from our publishers. I truly believe that not advocating would be a dereliction of our duty. I have no interest in pulling the ladder up behind me. I'd rather lower it for others. Good books at reasonable prices keep more people reading, which is great for all of us. This is why I don't see my fellow writers as competitors but as colleagues.

Looking ahead, do you see this showdown between Amazon and Hachette—in which a standard aspect of doing business has erupted into a public fight representing a number of big-picture debates in the industry—leading to anything positive? Is it a landmark moment in the industry, or something that’s been blown out of proportion in the press and, ultimately, won’t affect much in the long run?

I don't see anything positive coming out of this. Authors' careers have already been irrevocably harmed. I know what they are going through; I went through this exact same thing when Barnes & Noble refused to carry my novel as part of a boycott of Simon & Schuster titles. Hachette won't remember why books didn't perform during this time; the bean counters will look at sales, and authors will be dropped. They'll carry a black mark for the rest of their careers. It tears me up that this is taking place. For these authors, there is no way to blow this out of proportion. They worked for years to get published, and now they find themselves like children harmed by a nasty marital dispute.

The real danger here is that the other four major publishers see this as a cause and join the fight. There is precedent for thinking they might. They have broken the law in the very recent past in order to collude and force terms on Amazon (and to force higher prices on readers). Publishers have a long and uneasy history with their largest retail partners. Barnes & Noble was the enemy before Amazon came along. Deeply discounted hardbacks were the evil-of-the-day when I was a B&N employee. Publishers seem loathe to give up control of their wares, but it's the mistake they made by forgetting who their real customers are. The culture inside publishing houses is one of catering to retailers and media outlets; hardly anyone talks about the reader, and that's a problem.

The result has been increased market share for self-published authors, who communicate directly with their readers, who price their e-books below what a mass market paperback used to cost, and who don't rely on DRM or fight piracy they way publishers do. I dearly want publishers to survive. I have titles with them. I read their books every day. I spent years selling their titles at bookstores and working with their sales reps. My blog is a tireless attempt to help them navigate the changing publishing landscape, because I want them to do well and to stick around. The end result of this dispute, if it continues, and if other publishers adopt similar stances when it comes to digital pricing, will be that publishers become irrelevant to the majority of readers. No one should want that.

There is so much room to grow the culture of reading so that everyone reaps the benefits. Right now, I have aligned myself with Amazon, because their customer-centric philosophy has done more to encourage reading and drive this industry forward than any other single company on the planet. Many think I'm overstating the case to suggest this, or that I sound like a shill. I'm a lifelong reader, bookseller, critic, writer, and publisher. If there's a company out there that is doing more to get people reading, I'm open to hearing who has as an alternative for me to support. Publishers who refuse to compete, who collude to raise prices on customers, who offer lockstep and dismal digital royalty rates? The media, who seems to care more about the health of middlemen than what's best for readers and writers? The Authors Guild, who advocates for large corporations and the top 1% of writers? Independent bookstores, who blacklist my books and the works of those who publish with Amazon imprints? If anyone can name a company working harder than Amazon to get more books in the hands of happy readers, please let me know what company that is. Because I'll abandon my support of Amazon in an instant and throw my puny little weight behind whoever it is. All I care about is books being read. I'm a shill for whoever makes that their prime directive.

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